Meantime, more individual UBS officials are being caught in the web. In April, U.S. authorities snagged Martin Liechti, UBS' Zurich-based head of wealth management for the Americas, as he was transiting a U.S. airport. They confiscated Liechti's passport and ordered him to remain in the United States as a material witness.

He stayed at the Four Seasons hotel in Miami until August, when he was allowed to leave the country. His lawyer, David Sornow, says that Liechti ''was permitted to go home, because he resolved his status'' with U.S. authorities.

On Nov. 12, Weil was indicted on charges of conspiring with other executives, managers and clients, who are not charged, to defraud the United States by hiding huge fortunes offshore between 2002 and 2007. The 49-year-old Zurich banker relinquished his duties, pending a resolution of the case.

'Mr. Weil denies any suggestion that he was aware of, engaged in or tolerated any illegal conduct in the operation of UBS' U.S.-cross-border business,'' said his attorney, Aaron R. Marcu. ``We fully intend to fight this indictment and look forward to vindicating Mr. Weil's good name.''

One problem: Weil is in Switzerland, which doesn't typically extradite Swiss citizens.

Some see his indictment as a bid to ratchet up pressure on the Swiss and on UBS to turn over customer names in the civil proceeding.

''The government prosecutors are taking a shot at UBS with a view toward getting an attitude adjustment,'' says Edward M. Robbins Jr., a Beverly Hills tax attorney who represented Olenicoff. ``They could just as easily have put UBS on the indictment.''

MOVING FORWARD

Mark Branson, UBS' chief financial officer of wealth management and business banking, surprised a Senate subcommittee by declaring the bank ''is exiting entirely'' the business of serving U.S. customers with offshore services. An apologetic Branson told the Senate Permanent Subcommittee on Investigations that the bank's own internal investigation had suggested that ''misconduct appears to have occurred,'' including the creation of sham offshore companies to defraud tax authorities.

He said the bank was also prohibiting foreign-based bankers from visiting the United States to serve clients.

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